Having dropped below 1.2400 after the UK inflation data was released earlier in the day, GBP/USD staged a modest recovery and seems to have steadied above 1.2400. Rising US Treasury bond yields support the US dollar, not allowing the pair to gain traction.

GBP/USD is trading below the key 1.2400 level, where the Fibonacci 23.6% retracement of the downtrend that started on April 21 and the 100-period SMA on H4 are located. In case this level is confirmed as resistance, the pair could suffer additional losses toward 1.2340 (20-period SMA) and 1.2300 (psychological level, static level, 50-period SMA).

On the upside, bulls could show interest if GBP/USD manages to stabilize above 1.2400. In this scenario, the pair needs to clear 1.2450 (static level) in order to test 1.2500 once again.